European stocks rose sharply; political developments are the focus of Investing.com
Investing.com – European stock markets rose sharply on Thursday, boosted by overnight gains on Wall Street as investors focused on political developments in the region.
At 03:10 ET (07:10 GMT), Germany was trading 0.3% higher, France was up 0.6% and the UK was up 0.5%.
Do you consider cuts on the agenda?
European energy trailed from overnight gains on Wall Street, and a record high for shipments in holiday-shortened trade, after weak labor and economic activity readings raised the prospect that the Federal Reserve will cut interest rates in September.
Interest rates were cut last month and signaled more easing in the coming months, but did not commit to the timing of the next move.
The ECB should not rush into the next interest rate cut, Slovenia’s central bank governor Bostjan Vasle said on Wednesday, as a number of risks could still affect inflation in the eurozone.
However, the Director of the European Department of the International Monetary Fund, Alfred Kammer, took a different decision, saying that inflation in the region is still on track, which provides room for the central bank to lower interest rates.
There is little in the way of important economic data on the calendar for Thursday, and trading is likely to be affected by the US Independence Day holiday.
The UK is going to the polls
Investors will also be looking for more political clarity, with the UK heading into a general election.
The opposition Labor Party is expected to record a major victory, ending the Conservative Party’s 14-year rule.
However, markets appear nervous about the potential change, as the Labor Party is keen to appear fiscally responsible and the Conservative Party’s reputation for economic stewardship has been badly damaged during years of political turmoil.
Sunday also sees an important legislative vote in France.
The far-right National Rally won the popular vote last weekend, and the two possible scenarios are a government led by the far-right National Rally or a hung parliament.
Lufthansa to increase ITA stake?
Lufthansa (ETR:) stock rose 0.3% after the German airline’s CEO said, in an interview published on Thursday, that the airline would consider increasing its stake in Italy’s ITA Airways to 90%, starting early next year.
Carsten Spohr was speaking after his company received EU antitrust approval to buy 41% of state-owned ITA.
Irregularity falls into economic matters
Crude prices fell on Thursday, reversing from a two-month high as soft US economic data raised some concerns about long-term demand.
At 03:10 ET, futures (WTI) traded 0.8% lower at $83.21 a barrel, while the contract was down 0.7% at $86.70 a barrel.
These job losses followed signs of a sluggish U.S. managers’ index, which signaled some cooling in the world’s largest economy.
PMI data from China’s imports also came in lower on Wednesday, raising concerns about the strength of the economy in the world’s largest exporter.
That said, losses are small for the market supported by official data from, released on Wednesday, showing that US crude and fuel stockpiles all fell more than expected last week.
